From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Tue Nov 11 2003 - 01:04:47 EST
--- Rakesh Bhandari <rakeshb@STANFORD.EDU> wrote: > Ajit wrote: > > > One may think that increase in labor > >productivity may increase labor militency and > increase > >the real wages but at the same time increase in > labor > >productivity may be associated with increase in > >unemployment that may reduce labor militency. > > But labor militancy may have nothing to do with it. > Since wage > contracts are in money terms and productivity is > presumably rising > faster on the commodity side than the money side of > the exchange > equation, a constant money wage will result in a > higher real wage. > Again the assumption here is a commodity theory of > money. What > happens with fiat money is not clear. > > Rakesh ____________________________ Rakesh, The point I was making is that real wage is a long term phenomenon for Marx. It basically refers to the standard of living of the working class at any given time, and a lot of things goes into determining it. A short term immediate impact of a rise in labor productivity on the standard of living of the working class cannot be predicted since many other things have to be taken into account at the same time. Your point is more Keynesian in nature. Even if we assume that workers bargain for money wages, it is not clear why rise in labor productivity must lead to fall the prices of other things. Monetary authorities could easily increase the money supply and create a general inflation or at least not allow the prices to fall in money terms. Even when you are dealing with gold or silver money, the debasement of coins have been a regular phenomenon in history. Furthermore, there is no theoretical ground to suggest that rise in productivity is laways greater in other sectors than the money commodity sectors--remember discovery of new gold and silver mines over the period of history. Cheers, ajit sinha __________________________________ Do you Yahoo!? Protect your identity with Yahoo! Mail AddressGuard http://antispam.yahoo.com/whatsnewfree
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